Silver Analysis: Safe-haven demand and expectations of interest rate cuts fueled the rebound, while the US dollar remained a limiting factor.
2026-02-07 02:05:12
On Friday (February 6), during the US trading session, spot silver prices rebounded sharply, rising as much as 9.64%, successfully reversing earlier losses. Despite significant market uncertainty, particularly the downward pressure on silver prices from a stronger dollar, safe-haven demand and expectations of a Federal Reserve rate cut continued to support the price increase.
Fundamental analysis
Rising Safe-Haven Demand: Increased uncertainty in global markets, particularly geopolitical tensions and US diplomatic negotiations, has fueled risk aversion. This sentiment has driven demand for precious metals, especially silver, which has become more attractive as a safe-haven asset. Investors, in a risk-averse climate, are allocating funds to precious metals such as gold and silver to hedge against market volatility.
Interest Rate Cut Expectations: Weak signals from the US labor market and relatively weak economic data have fueled market expectations of a Federal Reserve interest rate cut. This expectation has supported the price of non-yielding assets such as silver, as rate cuts typically reduce the opportunity cost of holding precious metals. As more investors seek to diversify their portfolios, silver, as an alternative to gold, has attracted increasing inflows.
Silver Supply and Demand: Recent reports suggest that COMEX may face a silver delivery crisis, with delivery pressure expected as early as March. COMEX's registered silver reserves have fallen to 103 million ounces, while open interest in the market has reached 429 million ounces. If 25% of these contracts require physical delivery, COMEX may face the risk of delivery default. Even if March is successfully navigated, this delivery pressure could intensify again in May or July, which would undoubtedly have a strong upward driving effect on silver prices.
Technical Analysis
(Spot silver daily chart source: EasyTrade)
From a technical perspective, silver prices have been highly volatile, recently dipping below the $70 mark before rebounding strongly, showing signs of support. Currently, the market is seeking a stable consolidation range. If silver prices can hold above $70 and maintain support at that level, further rebounds are possible. Key support remains around $65-$66.
For investors, technical indicators suggest that a break above the $90 resistance level could trigger stronger upward momentum. However, due to high market volatility, silver prices are likely to continue experiencing sharp fluctuations, making precise money management and appropriate position sizing crucial.
Outlook
Despite the recent strengthening of the US dollar, which has somewhat constrained silver prices, safe-haven demand, expectations of interest rate cuts, and market concerns about physical silver supply pressures have collectively supported the upward trend in silver prices. If silver can break through the current technical resistance level and surpass $90, the price could potentially approach $200, especially driven by uncertainties such as the COMEX delivery crisis.
However, market volatility remains high, and investors need to remain cautious and closely monitor the dollar's performance and changes in US economic data. If silver prices can hold above current support levels, a more robust upward trend may follow. However, if they fail to hold above support, prices may experience a pullback.
Conclusion
In summary, the silver market is currently facing multiple influencing factors. While the strength of the US dollar may limit its short-term upside potential, safe-haven demand and expectations of interest rate cuts continue to support silver's rebound. As market attention continues to focus on supply and demand tensions, silver prices may see new upward opportunities in the future. Investors should seize these opportunities while also being wary of significant market volatility.
Fundamental analysis
Rising Safe-Haven Demand: Increased uncertainty in global markets, particularly geopolitical tensions and US diplomatic negotiations, has fueled risk aversion. This sentiment has driven demand for precious metals, especially silver, which has become more attractive as a safe-haven asset. Investors, in a risk-averse climate, are allocating funds to precious metals such as gold and silver to hedge against market volatility.
Interest Rate Cut Expectations: Weak signals from the US labor market and relatively weak economic data have fueled market expectations of a Federal Reserve interest rate cut. This expectation has supported the price of non-yielding assets such as silver, as rate cuts typically reduce the opportunity cost of holding precious metals. As more investors seek to diversify their portfolios, silver, as an alternative to gold, has attracted increasing inflows.
Silver Supply and Demand: Recent reports suggest that COMEX may face a silver delivery crisis, with delivery pressure expected as early as March. COMEX's registered silver reserves have fallen to 103 million ounces, while open interest in the market has reached 429 million ounces. If 25% of these contracts require physical delivery, COMEX may face the risk of delivery default. Even if March is successfully navigated, this delivery pressure could intensify again in May or July, which would undoubtedly have a strong upward driving effect on silver prices.
Technical Analysis
(Spot silver daily chart source: EasyTrade)
From a technical perspective, silver prices have been highly volatile, recently dipping below the $70 mark before rebounding strongly, showing signs of support. Currently, the market is seeking a stable consolidation range. If silver prices can hold above $70 and maintain support at that level, further rebounds are possible. Key support remains around $65-$66.
For investors, technical indicators suggest that a break above the $90 resistance level could trigger stronger upward momentum. However, due to high market volatility, silver prices are likely to continue experiencing sharp fluctuations, making precise money management and appropriate position sizing crucial.
Outlook
Despite the recent strengthening of the US dollar, which has somewhat constrained silver prices, safe-haven demand, expectations of interest rate cuts, and market concerns about physical silver supply pressures have collectively supported the upward trend in silver prices. If silver can break through the current technical resistance level and surpass $90, the price could potentially approach $200, especially driven by uncertainties such as the COMEX delivery crisis.
However, market volatility remains high, and investors need to remain cautious and closely monitor the dollar's performance and changes in US economic data. If silver prices can hold above current support levels, a more robust upward trend may follow. However, if they fail to hold above support, prices may experience a pullback.
Conclusion
In summary, the silver market is currently facing multiple influencing factors. While the strength of the US dollar may limit its short-term upside potential, safe-haven demand and expectations of interest rate cuts continue to support silver's rebound. As market attention continues to focus on supply and demand tensions, silver prices may see new upward opportunities in the future. Investors should seize these opportunities while also being wary of significant market volatility.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
